Entertainment, Liquor & Gambling Shares Suffer As GE15 Results In Hung Parliament
Investors are rushing to sell off their shares before prices dip further.
The Malaysian share market has taken a hit, with mostly liquor, entertainment, and gambling stock prices plummeting
According to The Star, FTSE Bursa Malaysia KLCI (FBM KLCI) was down 14.29 points to 1,435.03. The overall market reflected a negative projection of 426 decliners and only 45 gainers.
As of 4pm, Heineken Malaysia Bhd has dropped 5.98% to RM23.14 per share since the opening hour, while Carlsberg Brewery Malaysia Berhad has dropped 5.69% to RM22.88.
Genting Malaysia Bhd was down by 10.7% when the market opened before recovering to a 4.80% drop, trading at RM2.58 per share as of 4pm.
The companies affected saw RM2.55 billion of their cumulative market capitalisation wiped out, according to The Edge Markets.
Additionally, the ringgit fell almost 0.8% to the US dollar, the lowest its ever been in seven months, reported Reuters.
A hung parliament as a result of the 15th General Election (GE15) is thought to be the cause of the stock price plunge
The election saw, Perikatan Nasional (PN) rise in the ranks by winning 73 seats, fighting neck and neck with Pakatan Harapan (PH), who took the majority seats with 82 seats under their belt. Barisan Nasional (BN) was left far behind in the electoral race, coming in third with only 30 seats.
In a twist of events, however, PN's decision to merge with Gabungan Parti Sarawak (GPS) and Gabungan Rakyat Sabah (GRS) has resulted in a high possibility of the coalition coming out on top.
Image via Free Malaysia Today
Economists have weighed in on the situation and provided their reasons for concern
Reuters spoke with head of Asia FX strategy at RBC Capital Markets in Singapore, Alvin Tan, who said his concerns stem from PN being a conservative Malay-Muslim alliance led by former prime minister Tan Sri Muhyiddin Yassin.
Due to the religious nature of the coalition that could potentially govern Malaysia, "sin sectors" are left in a rocky situation.
"There is a question mark that is triggered by this rise of ethno-religious politics in Malaysia, with longer term implications for economic and social policy," Tan said.
An economist at Natixis in Hong Kong, Trinh Nguyen, is more concerned about the instability of Malaysia due to the continual status of a hung parliament.
"This is not ideal for Malaysia, which has been dealing with political challenges for some time now. The results confirm the concern that even if a coalition is formed, no ruling party means it is very hard to move forward decisively, as politics is now taking precedent over economics," said Nguyen.
Read more of the latest GE15 updates on SAYS:
Leave a comment